Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 11, Problem 5IAPA
To determine
The graph showing
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
(Figure: Softella) Refer to the figure. The figure shows a market for medicated tissues. Assume that the only use for these tissues
is to wipe and clean one's hands, thus preventing germs from spreading to other people. What is the dollar amount of the
external benefit (per box) that is created by the use of this product?
Supply
$16
12
Social value
Demand
Quantity of boxes of
softella medicated
500
700
tissues
Select one:
a. $16
b. $12
c. $24
d. $8
1. For each of the goods listed below, discuss whether the
good is likely to entail an external cost or an external
benefit. Additionally, explain if the market is likely to
produce more or less than the social optimal.
a. Vaccinations
b. Cigarettes
c. Antibiotics
d. Sriracha sauce
a. Draw a graph showing the market for ride-hailing services in midtown Manhattan before the congestion fee was imposed. Indicate the efficient equilibrium quantity and the market equilibrium quantity
Chapter 11 Solutions
Foundations of Economics (8th Edition)
Ch. 11 - Prob. 1SPPACh. 11 - Prob. 2SPPACh. 11 - Prob. 3SPPACh. 11 - Prob. 4SPPACh. 11 - Prob. 5SPPACh. 11 - Prob. 6SPPACh. 11 - Prob. 7SPPACh. 11 - Prob. 8SPPACh. 11 - Prob. 9SPPACh. 11 - Prob. 10SPPA
Ch. 11 - Prob. 1IAPACh. 11 - Prob. 2IAPACh. 11 - Prob. 3IAPACh. 11 - Prob. 4IAPACh. 11 - Prob. 5IAPACh. 11 - Prob. 6IAPACh. 11 - Prob. 7IAPACh. 11 - Prob. 8IAPACh. 11 - Prob. 9IAPACh. 11 - Prob. 1MCQCh. 11 - Prob. 2MCQCh. 11 - Prob. 3MCQCh. 11 - Prob. 4MCQCh. 11 - A renewable common resource is used sustainably if...Ch. 11 - Prob. 6MCQCh. 11 - Prob. 7MCQCh. 11 - When ITQs are assigned, the market price of an ITQ...
Knowledge Booster
Similar questions
- Which of the following is an example of an externality? (x) cigarette smoke that permeates an entire restaurant (y) a flu shot that prevents a student from transmitting the virus to her roommate (z) a beautiful flower garden outside of the local post office Select one or more: a. (x), (y) and (z) b. (x) and (y) only c. (x) and (z) only d. (y) and (z) only e. (y) onlyarrow_forwardSoybeans are produced and sold in a perfectly competitive market. The fertilizers used in soybean production generate a negative externality by seeping liquid contaminants into local rivers. (a) Draw a correctly labeled graph of the soybean market, and show each of the following. (i) The marginal private cost, labeled MPC (ii) The marginal social cost, labeled MSC (iii) The marginal social benefit, labeled MSB (iv) The market equilibrium quantity, labeled QC (v) The socially optimal quantity, labeled QS (vi) The area of the deadweight loss, shaded completely (b) Assume the government sets a binding price floor such that the quantity demanded in the market is between QS and QC. (i) What will happen to the quantity produced? (ii) Will the price floor reduce the deadweight loss? Explain. (c) Assume instead of a price floor, the government decides to impose a lump-sum tax. What will happen to the socially optimal quantity? Explain. (d) Assume instead of a lump-sum tax, the government…arrow_forwardChapter 8 in Tietenberg and Lewis looks at climate change, the most important environmental issue of our time. Economists generally agree that putting a price on carbon is the best approach to reducing climate warming carbon emissions. The two main strategies for doing this are carbon taxes and the cap and trade version of emissions trading. Discuss the pros and cons to these two approaches to pricing carbon. Why do economists favor these kinds of market-based strategies to pollution control over “command and control” approaches such technology standards?arrow_forward
- International Agreements on Trade and the Environment a. In panel A, Home enjoys positive production externalities b. In panel B, Home enjoys positive consumption externalities associated with a particular good. Label the supply and social associated with a good. Label the demand and social marginal marginal cost curves on Panel A below. benefit curves on Panel B below. Panel A: Positive production externality Panel B: Positive consumption externality 20 S SMC 20 D SMB 19 19 S 18 18 17 17 16 16 15 15 14 14 13 13 12 12 11 11 10 10 P. H P 9. 8 8. 7 7 P W 6 W 4 3 2 1 1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Quantity 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Quantity Price Pricearrow_forwardThe following graph shows market equilibrium of paper production. There are negative externalities in production and the Marginal External Cost is $5 per unit. We need to find the efficient allocation point. P 0 i. Do we correct the Marginal Social Benefit or Marginal Social Cost, and how? ii. Draw the corrected curve of MSB or MSC and mark the efficient point e. (Draw on paper. Take a photo and attach or send via email.) S D Q Attempt 4 Minu Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardQUESTION 6 Marco runs an organic cafe in the middle of an industrial office zone. He has a lot of customers with only 6 allocated car parking spaces for them. Often, his customers use the car parks designated for clients at Eloise's architectural studio nearby. 1. Marco's cafe does not produce any negative externalities. 2. Marco's cafe creates a negative externality for Eloise's architectural studio. 3. To be socially efficient, Marco needs to pay for more car spaces near his cafe. Which of the above statements are true: O Only 1 is true. O Only 2 is true. O Both 1 and 2 are true. O Both 2 and 3 are true. O All three are true. O O Oarrow_forward
- Question 1. What is meant by "the market system?" Question 2. How is the market system justified? Question 3. What, exactly, is "fraud?" Quesetion 4. What is an "externality?" Question 5. What is "market failure?"arrow_forwardRefer to Figure. The graph represents a market in which 24 22 22 Price 18 16 81 Social cost (private cost and external cost) Supply (private cost) Demand (private valne) 120 160 Quantity a. Othere is no externality. b. Othere is a positive externality. c. Othere is a negative externality. d. The answer cannot be determined from inspection of the graph.arrow_forwardGive an example of a positive externality and an example of a negative externality that exist in the economy? Share your thoughts in a paragrapharrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
Microeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506756Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc